The Week Ahead

The Economic Data calendar for the week of the 13th of June through the 17th of June is full of critical releases and events. Here is a snapshot of some of the headline numbers that we will be focused on.

CLICK IMAGE TO ENLARGE.

This Week In Hedgeye Cartoons

Our cartoonist Bob Rich captures the tenor on Wall Street every weekday in Hedgeye's widely-acclaimed Cartoon of the Day. Below are his five latest cartoons. We hope you enjoy his humor and wit as filtered through Hedgeye's market insights. (Click here to receive our daily cartoon for free.)

Enjoy!

1. LOST (6/10/2016)

What can we expect from the FOMC next week?

"Remember that projecting an air of confidence and maintaining maximum policy optionality requires carefully treading the hawkishly dovish messaging line … or maybe it’s the dovishly hawkish line," Hedgeye U.S. Macro analyst Christian Drake wrote in today's Early Look.

In other words, if you're hoping for clarity, don't hold your breath. There's more nonsensical Fed-speak to come.

2. Drinking The Kool-Aid? (6/9/2016)

Did you drink the central planning Kool-Aid?

3. Squirrelly (6/8/2016)

This one speaks for itself.

4. Sobriety Checkpoint Ahead (6/7/2016)

FYI: The Yellen Fed isn't "data dependent." It's S&P 500 dependent.

5. Yellen & Screamin' (6/6/2016)

The mercurial Fed has pivoted from Hawkish (in December) to Dovish (March/April) to Hawkish (May). With today's speech, market consensus now perceives Yellen & Co. as flipping back to Dovish here in June. Clearly, the Fed is perpetuating a massive amount of volatility in macro markets.

Cartoon of the Day: LOST

What can we expect from the FOMC next week?

"Remember that projecting an air of confidence and maintaining maximum policy optionality requires carefully treading the hawkishly dovish messaging line … or maybe it’s the dovishly hawkish line," Hedgeye U.S. Macro analyst Christian Drake wrote in today's Early Look.

In other words, if you're hoping for clarity, don't hold your breath. There's more nonsensical Fed-speak to come.

Risk Managed Long Term Investing for Pros

Capital Brief: No Money, Mo' Problems For Trump?

Editor's Note:Below is a brief excerpt from Hedgeye Potomac Chief Political Strategist JT Taylor's Capital Brief sent to institutional clients each morning. For more information on how you can access our institutional research please emailsales@hedgeye.com.

NO MONEY, MO’ PROBLEMS:

Donald Trump’s finance team held its first official meeting amid concerns over the campaign’s lack of a finance team, infrastructure and coordination with the RNC with less than five months left to prepare for the general election. In most election cycles, fundraising for presidential campaigns starts 18 to 24 months out - and Trump will be at a disadvantage out of the gate given his continued controversies and general lack of enthusiasm among the Republican donor class leading many to question whether Trump can achieve his previously stated goal of raising $1 billion.

Donors are disturbed with the threadbare nature of his campaign which continues to struggle in carrying out even the most basic of functions. He lacks pollsters, data and field expertise, a policy-writing shop, and a communications apparatus - and will soon find that the general election is a different animal than the primary.

CLINTON’S CASH COW:

On the other hand, when it comes to fundraising, Hillary Clinton and the Democrats are running like a well-oiled machine. She’s spent well over $200 million, has a large campaign staff with seasoned veterans, and continues to pad her war chest every day. Additionally - with Clinton, well, being a Clinton - she enjoys a deep bench of supporters ready to fundraise, cut ads, hit the campaign trail, and utilize social media. When Bernie Sanders finally exits the race, she’ll look to tap into a deep reservoir of new (and smaller) donors padding her fundraising lead.

WARRENTED ENDORSEMENT:

In what may be an audition for the prototypical running mate, Elizabeth Warren launched another blistering attack on Donald Trump, the Republican party, and calls for Wall Street reform. Warren has been suggested as Clinton’s veep choice by none other than Minority Leader Harry Reid, despite his warning on choosing a senator from a state with a Republican governor. The case for Warren is clear - she’s an outspoken populist-progressive leader who would rally the supporters of Bernie Sanders to Clinton’s cause.

Remember The Fed's December Rate Hike? What Happened Again?

Takeaway:Following the Fed's December rate hike, Long Bonds (our favorite macro call) rallied to up 12% year-to-date versus 2.6% for the S&P 500.

As the Fed flounders from rate hike rhetoric to cautious soothsaying, Treasuries have rallied. Take a look at the flattening of the yield curve since the Fed decided to "raise interest rates" in December 2015. The yellow line is the yield curve on 12/15/15 and today's is the green line.

Rate hike ... What rate hike?

Click image to enlarge.

To be clear, long the Long Bond (TLT) has been our most vocal Macro call.

Heading into this year, it was a massively contrarian and in direct opposition to Wall Street consensus, which remained convinced the 10yr Treasury yield would hit 2.5% to 3% on Fed rate hikes.

Guess what? Our Long Bond call...

IT'S WORKING

The flattening of the yield curve has paid off massively for investors in TLT. Below are the year-to-date returns on Long Bonds versus the S&P 500.

This Is One of the Top-3 Stock Market Bubbles in History

In this excerpt from The Macro Show this morning, Hedgeye CEO Keith McCullough and Demographics Sector Head Neil Howe discuss why “the stock market is one gigantic emotional rollercoaster” perched perilously at its peak.

Early Look

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